\section{Ecosystems Theory}
\label{sec:ecosystemstheory}

The term \textit{ecosystem} is often thought of as a biological description of how organisms are interlinked and keep an energy flow. Oxford's \textit{Dictionary of Social Sciences} describe an ecosystem as \textit{``the complex relations among all organisms in a given area as a single biological system linked by flows of energy (such as the food chain)''} \citep{ECOSYSTEMS}. It is evident how the fundamentals of ecosystems are related to the systems theory described in the previous section. 

A general ecosystem does not need to be either multi-goal-seeking, ideal-seeking, or even purposeful. To link it more to the taxonomy by \citep{ACKOFF} an ecosystem is an abstract system with certain reactions and responses which are not necessarily quantifiable. A specific kind of ecosystems has been identified in various literature as \textit{business ecosystems}, which are similar to purposive systems. Typically a business ecosystem refers to an organisation instead of an organism and we hope to be able to justify the use of business ecosystem theory on a city level, or \textit{ideal-seeking} system level. \bigskip

\noindent In this section we will outline some general business ecosystems theory written by James \cite{MOORE}. We will also use the text \textit{``Keystones and Dominators: Framing Operating and Technology Strategy in a Business Ecosystem''} by \cite{IANSITY} where business ecosystems are seen in a wider perspective and are linked to modern interdependent network industries. \cite{FRANSMAN} has written a book about the ICT ecosystem which is also relevant to elaborate on and compare to the business ecosystem theory. The hope is to be able use these theories to make our ``open data/smart city system'' more quantifiable.

\subsection{Business Ecosystems}

When one reads James Moore's introduction to the text \textit{``Predators and Prey''} it is striking how the ecosystems approach fits to our holistic approach to smart cities. He writes that \textit{``innovative businesses can't evolve in a vacuum. They must attract resources of all sorts, drawing in capital, partners, suppliers, and customers to create cooperative networks''} \citep[p. 75]{MOORE}. Cities might learn useful techniques from applying business ecosystems theory to their domain. The business ecosystem theory by Moore builds on the acknowledgement that

\begin{quote}
\textit{``... a company be viewed not as a member of a single industry but as
part of a business ecosystem that crosses a variety of industries. In a business ecosystem, companies co- evolve capabilities around a new innovation: they work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.''} \citep[p. 76]{MOORE}
\end{quote}

\noindent This is exactly what we have identified as a necessary approach to the formation of sustainable open data solutions on a city level. A system such a city of course has social complexities that a typical business ecosystem does not match. \bigskip

\noindent One major difference between business ecosystems theory and smart cities is the competition aspect. Moore highlights how business ecosystems compete against each other and says that \textit{``in fact, it's competition among business ecosystems, not individual companies, that's largely fueling today's industrial transformation''} \citep[p. 76]{MOORE} but such competition might not be beneficial for an open data environment that has to rely on commonly agreed standards and technologies. We want an ecosystem which can function as platform for other innovating and competing business ecosystems. And so one can conceptualise the city as a \textit{meta-ecosystem}. Nevertheless, such a platform presumably requires a huge amount of ecosystem leadership and governance and therefore Moore's evolutionary stages of a business ecosystem are still very relevant for us:

\begin{quote}
\textit{``Whether that means investing in the right new technology, signing on suppliers to expand a growing business, developing crucial elements of value to maintain leadership, or incorporating new innovations to fend off obsolescence, executives must understand the stages that all business ecosystems pass through – and, more important, how to direct the changes.''} \citep[p. 76]{MOORE}
\end{quote}

\noindent Table \ref{tab:businessecosystem} shows the four evolutionary stages of a business ecosystem according to \cite{MOORE}:

\begin{table}[H]
\centering

\begin{tabular}{|p{2.5cm}|p{5cm}|p{5cm}|} \hline
\textbf{} & \textbf{Cooperative Challenges} & \textbf{Competitive Challenges} \\ \hline
\textbf{Birth} & \footnotesize Work with customers and suppliers to define the new value proposition around a seed innovation. & \footnotesize Protect your ideas from others who might be working toward defining similar offers. Tie up critical lead customers, key suppliers, and important channels. \\ \hline
\textbf{Expansion} & \footnotesize Bring the new offer to a large market by working with suppliers and partners to scale up supply and to achieve maximum market coverage. & \footnotesize Defeat alternative implementations of similar ideas. Ensure that your approach is the market standard in its class through dominating key market segments. \\ \hline
\textbf{Leadership} & \footnotesize Provide a compelling vision for the future that encourages suppliers and customers to work together to continue improving the complete offer. & \footnotesize Maintain strong bargaining power in relation to other players in the ecosystem, including key customers and valued suppliers. \\ \hline
\textbf{Self-Renewal} & \footnotesize Work with innovators to bring new ideas to the existing ecosystem. & \footnotesize Maintain high barriers to entry to prevent innovators from building alternative ecosystems. Maintain high customer switching costs in order to buy time to incorporate new ideas into your own products and services. \\ \hline

\end{tabular}
\caption{\textit{The Evolutionary Stages of a Business Ecosystem} \citep[p. 77]{MOORE}}
\label{tab:businessecosystem}
\end{table}

\noindent Moore has outlined the cooperative and competitive challenges in each of the four stages. It seems mostly important to describe the cooperative challenges, while still remembering how to catalyse an environment for ecosystem competition. We will briefly go through each stage.

\begin{description}

\item[Stage 1 - Birth:] In this stage you focus on finding out what customers want and how to deliver it. Moore writes that \textit{``victory at the birth stage, in the short term, often goes to those who best define and implement this customer value proposition''} \citep[p. 76]{MOORE}. In this stage it is very clever to cooperate on finding common goals. Furthermore \textit{``a leader must also emerge to initiate a process of rapid, ongoing improvement that draws the entire community toward a grander future''} \citep[p. 79]{MOORE}. 

\item[Stage 2 - Expansion:] This stage is very much focused on the competition between ecosystems, which seems difficult for us to use. But an open data ecosystem also has to expand and the two conditions presented by Moore for successful expansion seem relevant:

\begin{quote}
\textit{``(1) a business concept that a large number of customers will value; and (2) the potential to scale up the concept to reach this broad market.''} \citep[p. 79]{MOORE}
\end{quote}

\noindent In our case the city (or whomever we identify) has to sell the open data idea and market it to relevant ecosystem participators. It has to understand that the survival of the ecosystem is depending on a successful adoption by its members. Stimulation of market demand is crucial for the ecosystem to survive this stage. Furthermore it is important to be aligned with suppliers so that they do not put constraints to the ecosystem development.  

\item[Stage 3 - Leadership:] The leadership stage is met when you are the main determinant of the future of the ecosystem. When leadership is reach\-ed, one has to maintain a certain balance:

\begin{quote}

\textit{``First, the ecosystem must have strong enough growth and profitability to be considered worth fighting over. Second, the structure of the value-adding components and processes that are central to the business ecosystem must become reasonably stable. This stability allows suppliers to target particular elements of value and to compete in contributing them. It encourages members of the ecosystem to consider expanding by taking over activities from those closest to them in the value chain. Most of all, it diminishes the dependence of the whole ecosystem on the original leader.''} \citep[p. 80]{MOORE}

\end{quote}

\noindent And so it is in this stage that e.g. standards and interfaces are formed, which are inherently important for open data initiatives.

\item[Stage 4 - Self-Renewal:] The self-renewal stage is a token of the fact that ecosystems has to be flexible, agile and constantly developing to overcome certain external threats that requires new business structures and processes to be formed \citep[p. 81]{MOORE}.

\end{description}

\subsubsection{The smart city as a networked industry}

\cite{IANSITY} are comparing business ecosystems to network industries and write that

\begin{quote}
\textit{``[i]n networked industrial environments [...], the performance of any organization is driven in large part by the characteristics and structure of the network, which influence the combined behavior of its many partners, competitors and customers.''} \citep[p. 2]{IANSITY} 
\end{quote}

\noindent Therefore they have identified the need for a framework describing the different ecosystem roles organisations deliberately or unknowingly undertake. This is one way to understand how ecosystems and how to make them sustain. We do not want to outline their whole framework in our thesis but just explain the relevance of their findings to our research. \bigskip

\noindent They identify three main innovation and operations strategies in a business ecosystem, we can call it three different roles: \textit{Dominator}, \textit{Niche}, and \textit{Keystone} \citep[pp. 40--47]{IANSITY}. We especially consider the Keystones to be interesting for our subject matter and the thoughts of \cite{IANSITY} will probably provide us with helpful considerations for the analysis.

\begin{quote}
\textit{``Keystones are the obvious regulators of ecosystem health. They are richly connected hubs that provide the foundation for creating many niches, regulate connections among ecosystem members and work to increase diversity and productivity. They provide a stable and predictable platform on which other ecosystem members can depend, and their removal leads to often catastrophic collapse of the entire system. They ensure their own survival and health by directly acting to improve the health of the ecosystem as a whole.''} \citep[p. 40]{IANSITY}
\end{quote}

\noindent They provide the examples of big software companies like the Microsoft Corporation are controlling the Windows and .NET platforms (C\#, Visual Basic, Azure, MSSQL, etc.), which form the foundation of a big percentage of the world's IT businesses \citep[p. 41]{IANSITY}. They have to consider the whole ecosystem - 3rd party developers, companies, partners, competitors, hardware providers, etc. - for sustaining its keystone role. 

But keystone examples are not limited to traditional technology industries, and so Walmart is an example of this. They have been successful in delivering real time sales information to its supplier network by means of its system called ``Retail Link''. They write that 

\begin{quote}
\textit{``Retail Link became a supply chain hub that connected the systems of manufacturers like Tyson Foods or Proctor and Gamble to the retail channel, without having these providers connect to each individual store''} \citep[p. 42--43]{IANSITY}
\end{quote}

\noindent Walmart has established a low level open data platform with its basis in business ecosystems theory. It is of course beneficial for Walmart itself but also beneficial for manufacturers in that Walmart effectively provides a low-cost, high efficiency and information-rich platform for the sale and distribution of retail products \citep[p. 43]{IANSITY}.

\subsection{The New ICT Ecosystem}

In book \textit{``The New ICT Ecosystem -- Implications for Policy and Regulation'',} \cite{FRANSMAN} is treating the whole ICT sector as an ecosystem, which is of course our of our scope. \textit{The new ICT ecosystem} refer to the set of complex business and innovation platforms based on the development of the Internet \citep[p. 1]{FRANSMAN}. We find his thoughts and conceptualisations relevant to our research because the narratives of smart city and open data are inherent parts of this ecosystem. The new ICT ecosystem is the superior system to smart cities and Fransman's elaborations on these external factors do matter to us and our research question. \bigskip

\noindent Fransman is primarily focusing on the challenges of the European ICT sector to follow the pace of the rest of the ICT ecosystem, e.g. the ICT sectors in USA and Asia, which have regulatory frameworks that have enabled them to gain competitive advantage \citep[p. 5]{FRANSMAN}. He puts main emphasis on how to overcome these challenges, which is necessary for long term social and economic sustainability.

One way to address this issue is to empower the users of ICT and not necessarily the producers \citep[p. 5]{FRANSMAN}. An open data platform that have the ability to involve all important smart city actors as innovative users is beneficial for our competitiveness. Of course that requires a solid ICT infrastructure, which is indeed out of scope of this thesis. Another way to strengthen our ICT ecosystem is to provide a platform for basic and long-term research and open data have that possibility \citep[p. 6]{FRANSMAN}. Public and private research actors have to influence an open data ecosystem to ensure its sustainability. This is a way to exploit the heterogeneity of the different ICT sectors and derive value from it.

This quote actually can function as a justifier of our research:

\begin{quote}

\textit{``The identification of strengths, weaknesses and solutions for the new ecosystem in Europe requires appropriate conceptual and analytical frameworks. One of the initial assumptions motivating the present book is that a further challenge must be faced in honing the conceptual and analytical tools that we need for this purpose.''}

\end{quote}

\noindent One important argument of Fransman's is that \textit{``it is the ability to innovate that determines how well this new ecosystem will perform in different national contexts''} \citep[p. 13]{FRANSMAN}. Therefore we have included innovation and open innovation theory in section \ref{sec:openinnovationtheory}.

We can use the notion of \textit{symbiotic interdependence} between ecosystem actors, which \textit{``may be mutually beneficial, although in some cases they
may be harmful to one of the parties''} \citep[p. 13]{FRANSMAN}. Again, one has to strive for a balance where the actors understand, accept, and benefit from their symbiotic interdependence. \bigskip

\noindent The last point by Fransman that we want to present here is the nexus between innovation and investment. The formation of an ICT ecosystem cannot be funded by only one actor and Fransman writes that
 
\begin{quote}
\textit{``since investment is often necessary for innovation it is important that an effective innovation system and its modes of governance provide both an adequate supply of investment funds and the incentives necessary to encourage the investment that must occur to facilitate innovation.''} \citep[p. 19]{FRANSMAN}
\end{quote}





